LONDON, Feb 25 (Reuters) – The head of a group planning a new multilateral defence bank has refused to be drawn on which countries will support the project, following a public bid by Canada to host the bank but signs that Britain and Germany were resistant to the plan.
The bank is being proposed by the Defence, Security and Resilience Bank Development Group, with the aim of providing financing for defence, security, and infrastructure projects for NATO members and allied nations.
No government has formally put money into the project yet, but a number of commercial banks including Deutsche Bank, JPMorgan and Canadian banks Royal Bank of Canada, BMO and TD Bank have signed up as partner banks.
The group’s CEO Rob Murray told a Chatham House event that a multilateral lender was needed for NATO countries’ rearmament efforts, but steered clear of saying how much support it currently had.
“I can’t really comment on where nations are on this particular project,” Murray said when asked if the DSRB could be located in Toronto and if Britain’s Treasury had shown any sign of dropping its resistance to the bank.
The DSRB’s aim is to become a global state-backed bank with a triple-A credit rating capable of raising 100 billion pounds ($135 billion) to fund defence projects.
British government officials though are concerned the proposal would not increase value from defence spending, while Germany wants to focus on the European Union’s recently created Security Action for Europe (SAFE) joint procurement scheme.
Murray stressed the need for a broader multilateral effort. He cited an estimate that rules governing how much capital banks need to hold when they lend to arms manufacturers mean that even if all European banks were involved, only half the region’s defence spending plans would be funded.
“You have to have a multilateral bank geared exclusively for defence that can provide that balance sheet power,” Murray said.
Speaking earlier at the event, Britain’s armed forces minister Alistair Carns said the rising threats from the likes of Russia meant the UK military only had a short time to get itself “war fighting ready”.
“My view would be 3-5 years (for a) geographically contained crisis,” Carns said. “If you look across Europe, the planning time is 2029-2030. People want to be ready”.
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(Reporting by Marc Jones; Editing by Jan Harvey)
By Marc Jones